Sen. Bennett's rural conference part II

Tom Egelhoff, owner of Smalltownmarketing.com presented a breakout session on advertising your small business. "Small businesses in America accounts for more than $1 trillion each year. Marketing that small business is a challenge. I'm here to talk about the problems and challenges small business owners face every day," said Egelhoff.

"In small town businesses, news of a bad experience by a customer travels fast. People in small towns know each other and they talk about what happens to them. If a person has a bad experience in a small town business, chances are that a lot of people will know about it in a very short amount of time.

"Customer service is one thing that small town business owners must keep in mind every day. Another equally important item is advertising your business. The first rule in advertising is never spend money on advertising unless you are 75 percent sure that the money spent on advertising will bring in more than the cost.

"Advertising accomplishes four things. It relates information to your customers, it projects the image of your company, it produces sales leads, and most importantly, it sells your product. Advertising sells the customer on getting face to face with you.

"Every minute of every day, someone needs what you are selling. If you don't capitalize on that need, you have lost an opportunity. There are four basic strategies to advertising. First, your product must provide a benefit or solution. Second, the customer must want your product. Third, your product must be tied to that benefit or solution. Lastly, the solution or benefit you provide must be communicated through advertising.

"When it comes to the cost of the advertising, the cheapest may not be the most effective. How do you think advertising a hula hoop on the radio would work? The medium you choose for your advertising must be the most effective way to advertise your product.

"Ineffective ads have no call to action for the potential customer. Another reason customers say they do not purchase a product is because no one has asked them to.

"There are three ways to make an ad sell. First, it must grab the attention of the reader. If there is nothing to entice the customer into looking at the ad, it will not be effective. An attention getter is not always a sale or giveaway.

"Second, the ad must hold the attention of the customer. This means there has to be a benefit for the customer or he will move on.

"The third way is to include a call to action for the potential customer. The customer must act in some way. Those acts can be coming into the store before a certain deadline, or calling for more information.

"People buy for a number of reasons. Whether it is security, self preservation, convenience, or recognition from others, all the reasons have one thing in common. That commonality is emotion. Buyers don't look at reality when making a decision, they are driven by a perception of reality.

"People don't like change. If you have a winning formula in your business, don't mess with it. Look what happened when Coca-Cola told people they were going to change the formula of Coke. Customers were up in arms. Don't mess with a winning formula. When logic and emotion come into conflict, emotion always wins. People will make an emotional decision then create a logical argument to support it.

"To make a business successful, positioning is very important. Create a market niche for your company, and then entice customers to have a good perception of your company through your marketing. Once the customer perceives that your product is number one, it is virtually impossible for any competitor to change their mind.

"If your are not number one, there is still hope for you. Find a category to be number one in. Everyone knows who was the first to fly solo across the Atlantic. Virtually no ones remembers who was second, but they can tell you who was third, Amelia Earhardt. Not because she was third, but because she was the first woman.

"A great ad should surprise the customer. State an ordinary message in an unusual way. Keep it simple, and get the customer involved in the ad. A great ad should also create curiosity, and a call to action by the customer is a must. Inspire them to act.

"Just like in a newspaper, the headline, the image and the text of the ad must work together. Always include a picture in your ads. Then remember, great ads never brag, they state the facts.

"Another thing that can work for a business owner is to keep a 'swipe' file. These are items or ads from your competitors that worked for them. A business owner can 'swipe' a lot of advertising ideas from their competitors. Be aware and learn as much as you possibly can about your competitors. This will give you ideas of ways to set yourself apart from them. Concentrate on what special skills or services you offer that makes you different.

"The first thing when developing an ad campaign is to create an advertising budget. Most companies budget from 5-7 percent of the previous years profit for advertising. The budget should adhere to the 50-25-15-10 rule. Fifty percent of your advertising budget should go to general advertising to be divided over the year evenly, 25 percent to sales and promotions, 15 percent to disasters and opportunities, and 10 percent for a slush fund.

"Use professionals when you can to create your ads, keep track of how your advertising is doing, and key your ads. A key is something in the ad that will let you know if it is working, such as 'mention this ad to get an additional discount.'

"There are three points to good advertising. First you must define your target market, second, know your products benefits, and third, track and evaluate your advertising dollars," said Egelhoff.

Egelhoff is the author of two books that specifically target small town businesses. His books can be found on his website, smalltownmarketing.com.